Brussels, 18/07/2016 (Agence Europe) - During a visit to Athens on Monday 18 July, the Commissioner for Economic and Financial Affairs, Pierre Moscovici, called for a reform of the employment market in Greece which preserves workers' rights.
“The idea is not to water down the rights of Greek citizens”, Moscovici said, following a meeting with the Greek Prime Minister, Alexis Tsipras, and the Greek finance minister, Euclide Tsakalotos. He called for the creation of a regulatory framework to stimulate “the competitiveness” of the Greek economy, stressing that the countries that have done similar have succeeded in creating jobs.
The second monitoring mission of the third Greek bailout plan, with an envelope of €86 billion from the European Stability Mechanism (ESM), will start in the autumn. Amongst other things, it provides for a reform of the employment market in Greece. The Greek government led by the radical left-wing party Syriza has already stressed its intention of bringing back collective agreements, which were shelved in previous rescue plans (EUROPE 11577).
Moscovici called for unity in Greece to conclude the reforms and send out a message of confidence to the creditors of Athens. “The more Greece is united internally, the more it will inspire confidence amongst its international partners”, he stressed, calling for the support of the government, Parliament and social partners in favour of the embryonic reforms.
Following the agreement which allowed Athens and its creditors to finalise the first monitoring mission of the third bailout plan, the EMS paid a sub-tranche of €7.5 billion to Greece (EUROPE 11557). A second sub-tranche of €2.8 billion will be paid in September, as long as the required prior measures have been taken.
Moscovici listed the priority actions to be carried out ahead of the second monitoring mission: - making the privatisation fund an agency operational; - the treatment of non-performing bank loans; - the reform of the markets for products and services; - creation of a strategy for “robust” economic growth capable of attracting investors; - an increased fight against tax evasion.
The Commissioner said that he firmly believed that if it sticks to the reforms laid down in the bailout plan, Greece will return to economic growth in the second half of 2016. Stressing the importance of giving hope of a better future to the Greek citizens, Tsakalotos called for the national authorities to be given more leeway to steer the adjustment programme.
Once the second monitoring mission has been finalised, the negotiations on Greek debt relief will resume with renewed vigour and this element will determine the IMF's involvement in the third bailout plan. Tsakalotos and Moscovici hope for an agreement on this issue by Christmas.
However, the positions of the two men appeared to diverge over the question of the primary budgetary surplus (not including servicing of the debt) required beyond 2018. The bailout plan provides for Athens to achieve a primary surplus of 3.5% of GDP and to maintain this level in the following years. “I would not suggest to reopen that”, Moscovici stressed. Tsakalotos, on the other hand, pointed out that the level of the primary surplus required “will depend on the solution given for the debt”. (Original version in French by Mathieu Bion)